The market risk premium is 14.12. A market risk premium in finance and economic is used to measure how much the level of risk.
A risk premium means a measure of excess return that is used by an individual to compensate being subjected to an improved degree of risk. A risk premium is the common definition being the expected risky return less the risk-free return.
To find the amount of risk premium, we can calculate it use beta of the stock formula:
Beta of the stock = (expected return - risk-free rate) ÷ risk premium
Because we need the amount of risk premium, then it will be:
Risk premium = Beta of the stock/(expected return - risk-free rate)
Risk premium = 1.75/(15.7% - 3.3 percent)
Risk premium = 1.75/(0.157 - 0.033)
Risk premium = 1.75/0.124
Risk premium = 14.12
Thus, the market risk premium is 14.12.
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The price elasticity of a good will tend to be larger if the fewer number of substitute goods will be available.
The cross elasticity of demand for substitute goods is always positive because the demand of one good increases at the time when the price for the substitute good increases however the cross elasticity of demand for complementary goods is always negative.
For example, if the price of coffee rises, the quantity demanded for tea which is the best substitute of coffee beverage will increase as consumers will switch to a less expensive but the substitutable alternative.
This is reflected in the cross elasticity of the demand formula, as both the numerator which is the percentage change in the demand of tea and denominator which is the price of coffee shows a positive increase.
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Answer: B. the additional enjoyment of one more speaking engagement (the marginal benefit) is rising.
Answer:
The correct answer is letter "D": strike vote.
Explanation:
Collective Bargaining is the act by which employees organized in labor unions negotiate with employers (mainly managers) about compensations and work conditions. <em>Wages, working hours, merit pay, </em>and <em>vacation length</em>, are common topics of discussion between the two parties.
<em>A strike is the stop of operations of a company because of unattended labor union request. The decision of going on a strike or not relies merely on the union and the </em><u><em>strike vote</em></u><em> is subject to that group only.</em>
Answer: c. It could allow real wages to downwardly adjust more easily.
Explanation:
When there is modest inflation, companies in the car manufacturing industry can simply decide not to increase nominal wages. This would lead to a fall in real wages as inflation would ensure that the nominal wages are less than they were worth before.
This decrease in real wages will allow the companies in the industry to reduce labor costs in real terms and become more competitive with the foreign manufacturers.
